Global stock markets fell sharply early this week, with concern over US inflation. Technology shares were hit particularly hard: the tech-heavy Nasdaq 100 index has fallen by 5% since 1 May. Investors’ US inflation expectations are at a 15-year high, says Naomi Rolnick in the Financial Times.

The five-year break-even rate (the difference between the yield on inflation-linked five-year Treasuries and nominal five-year bonds) shows that investors expect average inflation of 2.73% over the next five years, the highest this figure has been since 2006.

Spiking inflation could force the US Federal Reserve to tighten monetary policy sooner than expected. That would mean less liquidity sloshing around the market, which is harmful for stock prices. Markets were already struggling to digest some puzzling US jobs numbers, says Neil Irwin in The New York Times. Last week we learnt that the US added only 266,000 jobs in April, less than one-third of the amount predicted.

With the unemployment rate still elevated at 6.1%, does this mean that the promised boom has gone missing? A more likely explanation is that generous federal unemployment support, which has been extended until September, discourages people from seeking work, says Noah Williams for National Review Capital Matters. “Incentives still matter… make unemployment more attractive, and, all else equal, more people will remain unemployed.”

Business leaders are certainly complaining about a tight job market, adds Irwin. That is feeding through into higher wages. Average hourly earnings rose 0.7% last month; in leisure and hospitality, reporting some of the worst labour shortages, hourly wages surged by 4.8%. That should eventually feed through into higher inflation.

Kris Paterson is a writer for